Marketing Management

Group Assignment -1

UNITY UNIVERSITY
MBA REGULAR PROGRAM

Promotion, Advertising, and Sales Promotion Strategies

PREPARED BY: ALEWUYA ALIYI ---------------------------- 0051/11

 AYNALEM GETACHEW SEID----------------- 0052/11
 GELANE MEKONNEN---------------------------0072/11
 BIRUK GAREDEW-------------------------------0104/11

SUBMITTED TO: DR. BOGALE A.

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Table of Contents
PROMOTION STRATEGY ………………………………………………………………………………………………………… 01

The Composition of Promotion Strategy…………………………………………………………………………………… 02

Developing a Promotion Strategy………………………………………………………………………………………………03

Deciding the Role of the Promotion Components …………………………………………………………………………04

Determining the Promotion Budget………………………………………………………………………………………..……04

Integrating and Implementing the Promotion Strategy…………………………………………………………………05

Advertising Strategy…………………………………………………………………………………………………………………06

Steps to develop an advertising strategy……………………………………………………………………………………06

Advertising Objectives………………………………………………………………………………………………………………07

Alternative Levels for Setting Advertising Objective……………………………………………………..…………….07

Sales Promotion Strategy………………………………………………………………………………………………………… 08

Push Sales Strategy…………………………………………………………………………………………………………………..08

Pull Sales Strategy…………………………………………………………………………………………………………………… 08

Combining Push and Pull…………………………………………………………………………………………………….…… 08

Sales Promotion Activities and Targets…………………………………………………………………………………….…09

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I. PROMOTION STRATEGY

Initiating and maintaining a flow of communications between a company (brand) and its market targets.

Promotions are events, activities, sponsorships, and contests that create and increase awareness of
your product or service. Promotions differ from advertising because they are less educational in
nature than traditional advertisements. Sponsoring a youth sports organization, giving away free
samples at a mall, offering coupons in grocery stores, or promoting a sweepstakes or contest that
bring customers to your website are all examples of promotions. Promotions should be geared toward
the consumer demographic your market research determined is your best potential customer.

Promotion is an attempt by marketers to inform, persuade, or remind consumers and B2B users to
influence their opinion or elicit a response. Most firms use some form of promotion. Because company
goals vary widely, so do promotional strategies. The goal is to stimulate action from the people or
organizations of a target market. In a profit-oriented firm, the desired action is for the consumer to
buy the promoted item. Mrs. Smith’s, for instance, wants people to buy more frozen pies. Not-for-
profit organizations seek a variety of actions with their promotions. They tell us not to litter, to buckle
up, to join the military, or to attend the ballet. (These are examples of products that are ideas
marketed to specific target markets.) Promotional goals include creating awareness, getting people to
try products, providing information, retaining loyal customers, increasing the use of products, and
identifying potential customers, as well as teaching potential service clients what is needed to “co-
create” the services provided. Any promotional campaign may seek to achieve one or more of these
goals:

1. Creating awareness: All too often, firms go out of business because people don’t know they exist
or what they do. Small restaurants often have this problem. Simply putting up a sign and opening
the door is rarely enough. Promotion through ads on social media platforms and local radio or
television, coupons in local papers, flyers, and so forth can create awareness of a new business or
product. Large companies often use catchy slogans to build brand awareness...
2. Getting consumers to try products: Promotion is almost always used to get people to try a new
product or to get nonusers to try an existing product. Sometimes free samples are given away.
3. Providing information: Informative promotion is more common in the early stages of the
product life cycle. An informative promotion may explain what ingredients, inform the customer of
a new low price, or explain where the item may be purchased. People typically will not buy a
product or support a not-for-profit organization until they know what it will do and how it may
benefit them. Thus, an informative ad may stimulate interest in a product. Consumer watchdogs
and social critics applaud the informative function of promotion because it helps consumers make
more intelligent purchase decisions.

4. Keeping loyal customers: Promotion is also used to keep people from switching brands. Slogans
such as Campbell’s soups are “M’m! M’m! Good!” and “Intel Inside” remind consumers about the
brand. Marketers also remind users that the brand is better than the competition. For years, Pepsi
has claimed it has the taste that consumers prefer. Such advertising reminds customers about the
quality of the product or service. Firms can also help keep customers loyal by telling them when a
product or service is improved.

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5. Increasing the amount and frequency of use: Promotion is often used to get people to use more
of a product and to use it more often. The National Cattlemen’s Beef Association reminds
Americans to “Eat More Beef.” The most popular promotion to increase the use of a product may
be frequent-flyer or -user programs. The Marriott Rewards program awards points for each dollar
spent at a Marriott property. At the Platinum level, members receive a guaranteed room, an
upgrade to the property’s finest available accommodations, access to the concierge lounge, a free
breakfast, free local phone calls, and a variety of other goodies.
6. Identifying target customers: Promotion helps find customers. One way to do this is to list a
website as part of the promotion.
7. Teaching the customer: For service products, it is often imperative to actually teach the potential
client the reasons for certain parts of a service. In services, the service providers work with
customers to perform the service. This is called “co-creation.” For example, an engineer will need
to spend extensive time with team members from a client company and actually teach the team
members what the design process will be, how the interaction of getting information for the design
will work, and at what points each part of the service will be delivered so that ongoing changes can
be made to the design. For services products, this is more involved than just providing information
—it is actually teaching the client.

1. Composition of Promotion Strategy

A. Advertising:
Advertising consists of any form of non personal communication concerning an organization,  product
or idea that is paid for by a specific sponsor. The sponsor makes payment for the communication via
one or more forms of media. Among the advantages of using advertising to communicate with buyers
are the low cost per exposure, the variety of media newspapers, magazines, television, radio, internet,
direct mail and outdoor advertising control of exposure, consistent message content and the
opportunity for creative message design.

B. Personal Selling:
Personal selling consists of verbal communication between a salesperson and one or more
prospective purchasers with the objective of making or influencing a sale. Annual expenditures on
personal selling are much larger than on advertising, perhaps twice as much.

C. Sales Promotion:
Sales promotion consists of various promotional activities including trade shows, contests, samples,
point of purchase displays, product placement in films and other media, trade incentives and coupons.
Sales promotion expenditures are much greater than spending on advertising and as large as sales
force expenditures.

D. Direct Marketing:
Direct marketing includes the various communications channels that enable companies to make direct
contact with individual buyers. Examples are catalogues, direct mail, telemarketing, television selling,
radio and electronic shopping.

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E. Internet Marketing:
Included in this promotion component are the Internet, CD-ROM, Kiosks and interactive television.
Interactive media enable buyers and sellers to communicate with each other. The internet performs
an important and rapidly escalating role in promotion strategy.

F. Public Relations:
Public relations for a company and its products consist of communications placed in the commercial
media at no charge to the company receiving the publicity. For example, a news release on a new
product may be published in a trade magazine. The media coverage is an article or news item.

Interactive/Internet Marketing

Direct Marketing Advertising

Promotion
Components
Personal Selling
Sales Promotion

Public Relations

2. Developing a Promotion Strategy

MARKET TARGETING AND POSITIONING STRATEGIES

COMMUNICATION OBJECTIVES

ROLE OF PROMOTION COMPONENTS

Interactive/ Internet
Advertising Sales Promotion Public Relations Personal Selling Direct Marketing Marketing
PROMOTION BUDGET

PROMOTION COMPONENT STRATEGIES

Coordination
With Product,
INTEGRATE AND IMPLEMENT PROMOTION COMPONENT STRATEGIES Distribution,
And Price
Strategies
EVALUATE EFFECTIVENESS OF PROMOTION STRATEGY
3.1. ILLUSTRATIVE COMMUNICATION OBJECTIVES

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Need Recognition
Finding Buyers
Brand Building
Evaluation of Alternatives
Decision to Purchase
Customer Retention
3.2. DECIDING THE ROLE OF THE PROMOTION COMPONENTS
Expected contribution for each of the promotion components.
Which communication objective(s) will be the responsibility of each component?
What part of the budget will go to each component?

3.3. Factors Guiding the Role Assigned to Each Component

Market Target(s)
Desired Positioning
Role of Promotion in Positioning
Product Characteristics
Stage of Life Cycle
Situation Specific Factors

3.4. DETERMINING THE PROMOTION BUDGET

Objective and Task

All You Can Afford Budgeting Approaches Percent of Sales

Follow the Competition

3.5. Budgeting Methods

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3.5.1 Features

 Percent of Sales: Fixed percent of sales often based on past expenditure patterns.
 Comparative Parity: Budget is based largely upon what competition is doing.
 Objective and Task: Set objectives and then determine tasks (and costs) necessary to meet the
objectives.

3.5.2 Limitations

 Percent of Sales: The method is very arbitrary. Budget may be too high when sales are high and
too low when sales are low.
 Comparative Parity: Differences in marketing strategy may require different budget levels.
 Objective and Task: The major issue in using this method is deciding the right objectives so
measurement of results is important.

3.5. Integrating and Implementing Promotion Strategy

3.5.1 Integration Challenges

 Avoiding fragmentation
 Difficulty in evaluating productivity
 Differences in priorities
 Separate organizational units
 Assigning integration responsibility

3.5.2. Promotion Strategy Issue

 Expense/Response Relationships
 Allocation
 Impact on Brand Equity
 Integration of Promotion Components
 Evaluating Effectiveness

II. ADVERTISING STRATEGY

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 Advertising is a form of communication for marketing and used to encourage, persuade or
manipulate an audience (viewers, readers or listeners; sometimes a specific group) to continue or
take some new action. The word advertising comes form the latin advert ere”. That means "to
word "turn the mind toward"
 According to American Marketing Association “advertising is any paid form of non-personal
presentation and promotion of ideas, goods and services by an identified sponsor".
 Advertisement means spreading of information. The main purpose of every commercial
organization is to promote sales. Any activity towards sales promotion may be called as
promotional activity & advertisement is a kind of PROMOTIONAL ACTIVITY.
 Advertising is paying to get your message to potential customers. Unlike public relations,
advertising lets you control your message. A classic advertising strategy includes demonstrating a
need or a problem to your potential customer; offering a solution to help fill that need or solve the
problem; and showing how your product or service does that. Good advertising sells the benefits
of a product or service, rather than simply discuss the product or service.
 Advertising a product that is overpriced or unavailable in stores doesn't make sense, nor does
placing an ad for women's personal care products in a men's sports magazine. This is why
marketing functions come first in the sales process. Advertising supports marketing and applies a
specific message to specific audiences defined by market research as the best way to achieve
success

Steps to develop an advertising strategy:

1. Defining the Product or Service – Before developing the plans and strategies for advertising, the
product or service offered by the company is clearly defined. This means that the position of the
product in the market is determined. You have to understand the product and its customer base
for effectively marketing it to the people at large. It is also important to understand the primary
objective of the product or company.
2. Understanding the target audience – This is an important step in creating a strategy for
advertising. Various factors are to be considered for determining the target audience such as
demographic factors, psychographic factors, behavioural patterns, etc. The advertising plan is
created after considering these factors. For e.g. cosmetic and beauty products are aimed at the
women audience. The advertising strategy is derived accordingly.
3. Market research – Once the target market is determined, the next step is to study the market for
that particular product. Research about the products already available in the market, what
problems are faced in getting those products, what does the consumer desire from such products
and such other issues. A marketing and advertising plan can be derived with the help of this study.
Also, find out the latest trends in the market.
4. Developing a marketing plan – The strategies formed with the help of market research can be
put down as the plan of action for marketing the product. This means, a marketing plan is created
after determining the current trends in the market. The marketing plan aims to create a niche of
the product so that it stands out among the competition. The plan of action also helps to establish
the positioning of product.
5. Deciding communication media – The marketing plan is put to action using various channels of
communication. It is important to choose the right media or a media mix for advertising. This
depends on the product or service that is being marketed. The choice of the medium is made after
considering the target audience and market research. If a physiology equipment is to be marketed,
its advertisement will be put up as flyers or brochures in a doctor’s clinic or hospitals; in health
magazines and websites and so on.

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6. Budget - The budget may be determined either before or after creating an advertising strategy. It
can be based on the resources available to the company. If the company has an expensive budget,
they can carry out high impact advertising extensively. They can create effective advertising
strategy without worrying about the finance. On the other hand, if the company has limited budget,
that alone dictates the advertising strategy. Because, at every step of the market plan and
advertising strategy, they have to consider the budget.
7. Marketing methods – Company can consider from among two types of methods to advertise
while creating the strategy. They are push method and pull method. They can decide to go with
either depending on their strategy and objective. Push method aims to convince the retailers or
sales person to promote the product, whereas pull method is directly aimed at the consumers.
8. Modifying advertising strategy - This process does not end on creating and implementing the
advertising strategy. One has to stay in touch with the trends in marketing and modify the
marketing strategy time to time.

Developing a Marketing Deciding

Defining Underst Market Deciding Budget
marketing communicatio methods communica
the anding research tion media
the plan n media
Product/
Service target
audience Advertising
Objectives

• Expose communication to target audience

• Create awareness
• Change attitude(s)
• Increase Sales
• Generate profits

Alternative Levels for Setting Advertising Objectives

Type of Objective Increasing Uncertainty about Impact on

• Exposure
• Awareness
• Attitude Change

• Sales

• Profit

Increasing Difficulty of Measurement

III. SALES PROMOTION STRATEGY

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Consists of various incentives, mostly short term, intended to stimulate quicker and/or greater
purchase of particular goods/services by end-user consumers or value chain organizations. The
strategy process is similar to the design of advertising strategy.

Push Sales Strategy

The push sales strategy emanates from manufacturers who "push" their product through the supply
chain to the consumer. Incentives are offered that give each middle-carrier motivation to convince the
next person to buy the product. Traditionally, this technique includes premiums, wholesale discounts
and buy-back guarantees.

This technique is not only for the big players who vie to get their product carried by other retailers. If
you have a small retail outlet or own a service-providing company, you can still benefit from this
strategy. Offering a bonus to your staff for selling the product or service of-the-week is a "push"
technique. Give customers a free item for referring a friend to your business.

Pull Sales Strategy

The "pull" strategy works by getting the end consumer interested in the product to create a demand.
When the demand is there, the supply chain pulls it through, as retailers ask suppliers and
distributors, who in turn ask the manufacturer about the product. If your business has the resources,
can launch a campaign to get end consumers excited about your products. Television, print and
electronic advertising options lend themselves to the pull strategy.

Combining Push and Pull

To bolster sales, try combining the two systems. For instance, offer customers coupons, free gifts or a
frequent customer loyalty incentive to drive traffic to a business. These activities fall under the "pull"
strategy.

At the same time, offer your sales team an incentive such as a vacation contest, extra commission or a
better parking space for selling a particular product or moving a certain volume of merchandise. This
falls under the "push" strategy.

By combining the two methods as part of an overall promotion, you will be matching motivated
buyers with an eager sales team to increase sales growth.

Sales Promotion Activities and Targets

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Activities include trade shows, specialty advertising, contests, displays, coupons, recognition
programs, and free samples

Sales people
Consumer Buyers

SALES
PROMOTIO
N
Value Chain
TARGETS

Business Buyers

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